Tower, the maker of analog chips, surpasses its revenue and earnings forecast: $ 39 million

Tower, the maker of analog chips, surpasses its revenue and earnings forecast for the third quarter of 2021 and provides a better-than-average forecast for analysts' forecasts for the fourth quarter of 2021.
Tower, managed by Russell Olwanger, earned $ 39 million in the third quarter of 2021, which is 36 cents a share - based on US GAAP. This is a 27% increase over the second quarter of 2021, and a 157% increase over For the corresponding quarter in 2020.
Tower earned $ 45 million, which is 41 cents a share in the third quarter of 2021 on a non-GAAP basis, that is, less expenses related to allocating options to executives and employees and reducing intangible assets. This is an increase of 21% compared to the second quarter of 2021 and a jump of 135% compared to the corresponding quarter in 2020.
In doing so, Tower topped analysts' average profit of 37 cents on a non-GAAP basis in the past quarter. Tower's revenue grew 7% in the third quarter of 2021 compared to the second quarter of 2021, and 25% compared to the same quarter in 2020, and amounted to a quarterly record of $ 387 million - higher than the analysts' average forecast for the company's revenue in the past quarter.
Tower posted 40% organic growth in its revenue in the third quarter of 2021 compared to the same quarter in 2020. Tower defines organic growth as revenue neutralizing the change in revenues from Japanese company Nuvoton (formerly Panasonic Semiconductor) and revenues from Maxim from Texas - which signed long-term acquisition agreements with Tower, as part of the agreements under which Tower acquired manufacturing plants from the two companies.
Tower's gross profit increased by 16% in the third quarter of 2021 compared to the second quarter of the year and by 60% compared to the corresponding quarter in 2020. It totaled $ 85 million, which is 22% of turnover compared to 20% of turnover in the second quarter of 2021 and 17% of revenue in the corresponding quarter in 2020.
The increase in profit and gross profit was due to an increase in the efficiency of the factories, a more profitable mix of products and an increase in prices, while taking advantage of the surge in demand for chips in the global market. Tower's operating profit increased by 30% in the third quarter of 2021 compared to the second quarter of 2021, and by 131% compared to the corresponding quarter in 2020. It totaled $ 44 million, which is 11.4% of turnover compared to 9.3% of turnover in the second quarter of 2021 and 6.2% of turnover at the same time in 2020.
Tower's current operations generated a $ 107 million cash flow surplus in the third quarter of 2021 - compared to a $ 93 million cash flow surplus in the second quarter of 2021, and a $ 69 million cash flow surplus in the same period in 2020.
Tower forecasts that its revenue in the fourth quarter of 2021 will be $ 410 million with a 5% deviation in both directions. This forecast is higher than the average analysts' forecast for revenue of $ 394 million in the current quarter, and reflects growth of 19% compared to the fourth quarter of 2020 and organic growth of 26% compared to the corresponding quarter in 2020.